Gold finished the last trading week with moderate growth, amid a weakening dollar, which was under pressure from internal statistics. According to the reports presented last week, the volume of industrial production in the USA continues to decline for the second month in a row, below expectations were data on durable goods orders, sales of new housing and consumer price index. Published data confirm the more restrained position of the Fed in the matter of further raising interest rates, which is a strong factor of pressure on the US currency.
This week, the Fed policy and the dynamics of the dollar will remain in the center of investors' attention, since a two-day FOMC meeting should begin on Tuesday, which can clarify the plans of the regulator regarding further implementation of the monetary policy. After the release of weak domestic statistics, most investors expect the regulator to keep interest rates unchanged and update their forecasts for key economic indicators. The further market trend will depend on the decisions and comments of the regulator.
Also during the week are expected other important events that may have a strong influence on trading.
On Tuesday, the ZEW Institute will publish indices of economic conditions and sentiment in Germany, and in the United States will be known data on industrial orders for January.
On Wednesday, the UK will publish data on inflation, which may affect the future policy of the Bank of England.
In the US, the focus will be on the outcome of the FOMC meeting and the comments of Fed Chairman Jerome Powell.
On Thursday, the EU summit will be in the spotlight, one of the central topics of which should be the question of Brexit. On the same day, retail sales data in the UK will be known, and the Bank of England will announce its decision on interest rates. In the US, you should pay attention to the weekly report on unemployment compensations and indexes from the Federal Reserve Bank of Philadelphia.
The trading week will end with the publication of preliminary data on the PMI of the services sector and the manufacturing sector in the EU and the USA. Also on this day is scheduled publication of data on sales in the secondary housing market in the United States.
New trading week, gold opened with a moderate decline, but there are very good chances to continue the bullish movement. At the beginning of the month, around the 1285.00 mark, a rather strong reversal signal was formed, within which we can expect further development of the bullish movement with targets at the level of 1350.00. Inside the day you should pay attention to the support at 1295.00 and the resistance of 1305.00, from which you can look for entry points to the market.
Resistance Levels: 1300.00, 1305.00, 1310.00;
Support levels: 1295.00, 1290.00, 1285.00.
The main scenario is a small increase to 1305.00 and a decrease to 1295.00.
The alternative scenario is a breakdown of resistance at 1305.00 and an increase to 1310.00.
In the medium term, there is a good potential for growth in quotes, but locally on the chart there are signals for the development of a downward movement. Therefore, intraday preference is given to shorts that are worth looking for near the level of 1305.00.
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